-Caveat Lector-
>From the NewYorkObserver
> Salon I.P.O. Is Proof of New Adage: Editorial Doesn't Go Public
>
> by Carl Swanson
>
>
>
>
> Salon.com hit the ground–well, it just sort of hit the ground when it
> went public at last June 22. It was offered at $10.50, but by the end
> of the day it had fallen to $10.
>
> The initial public offering of the Internet magazine company had long
> been derided by other journalists out of some combination of jealousy
> and professional propriety–as if a sudden payday just wasn’t supposed
> to be a part of a journalist doing the job. Certainly not in something
> as, well, as self-promoting and San Francisco as Salon.
>
> But Salon.com had to go public. That’s what on-line companies do in
> San Francisco.
>
> These days, though Salon describes itself as a continuously updated
> "network of 10 subject-specific, demographically targeted Web sites,"
> it’s at its heart still an electronic alternative weekly, just like …
> certain other papers. Only now it’s worth $107 million. Its editor and
> chairman, David Talbot, may one day be rich enough to buy that
> apartment in North Beach and that house in the wine country that he
> mused about to Wired last January. "I think that most people think
> that Nasdaq has to be some sort of vehicle for karma," said Joey
> Anuff, editor in chief of Suck.com. "That some day they," meaning the
> instant "dot-com" winners, "will get their just desserts." Wired’s
> failed I.P.O. back in 1996 reinforced the idea that editorial doesn’t
> go public.
>
> But Mr. Talbot’s 4 percent (valued at $4 million after the I.P.O.) is
> not going to be worth much compared to James Cramer’s 14 percent take
> from TheStreet.com, which was worth $95 million the day that Salon was
> offered. And the market valuation of the company is puny compared to
> other Silicon Valley offerings. "It’s sort of relative," said Mr.
> Anuff. "Employee No. 200 at Yahoo is probably never going to be
> jealous of Employee No. 1 at Salon."
>
> Still, journalists have been getting rich for some time in San
> Francisco. Big "portals" like Excite and Yahoo Inc., which are worth
> far more than Salon would ever be, hired ex-editors to help put
> together their sites.
>
> People like Todd Lappin, a former Wired editor who saw that I.P.O. go
> down, left after it was sold to Condé Nast and now is setting himself
> up as "editorial consultant" to Guru.com, which is a site that’s being
> launched to help freelancers. "From the journalist’s point of view,"
> he said, "you think, I’ve spent so much time reporting on it, why not
> try it out?" And, he said, "there’s lot of local pride out here," for
> Salon, and it has done one thing that many on the Internet have been
> trying to do fervently: build a brand.
>
> "In San Francisco," said one West Coast Salon source, "you can’t walk
> two blocks without bumping into a multimillionaire … People doing a
> lot less important stuff than us, making a whole lot more money."
>
> "Talbot has a lot of ideas and every third one works," said one person
> who dealt with him. The place moved quickly–sometimes too quickly.
> People felt left behind. Areas were added for buzz and for
> sponsorships. The site bloated. The offices became crowded. Lines of
> authority became blurred. Mr. Talbot himself couldn’t micromanage by
> charm anymore.
>
> Instead, Mr. Talbot has been out selling the site, though often
> inaccurately when it came to fluffing its financials. His chief
> competitor, Slate editor Michael Kinsley, took a whack at him
> recently. "It’s insane that all these money losing organizations are
> going for these huge valuations," he said, reflecting what is most
> often said in the press about Salon’s I.P.O. But don’t get the idea
> that Mr. Kinsley is bereft in the Web economy: Slate employees get
> Microsoft Corporation stock. After 13 years at Microsoft and one year
> at Slate, the site’s managing editor retired at 40, and its first
> program manager retired at 30 after eight years at Microsoft.
>
> Somehow, Salon built a brand. Lacking in enough advertising or
> electronic commerce revenue to pay for its overhead, or some other
> futuristic revenue gimmick, "one of its big successes is recognizing
> and being a beneficiary of the fact that kind of splash-trash
> journalism makes incredibly good business," said Mr. Anuff. Which is
> how their exposing Representative Henry Hyde helped them go public
> because it built Salon’s name. Even had the stock not just sat there,
> at the bottom end of its possible $10.50-to-$13.50 offering range, few
> people were going to get rich off it. A recent hiring binge meant that
> many hadn’t vested. On June 21, New York editorial director Larua
> Miller e-mailed that she and the staff at 1500 Broadway weren’t
> planning a party. "They’ll probably be drinking cocktails in S.F., but
> then they do that a lot anyway."
>
> In some ways, Mr. Talbot and his 4 percent is what this story has been
> about all along. "I kind of doubted his schemes all along," said one
> Salon source. "He’s too much of a dreamer. But for the most part he’s
> pulled it off. So who the hell knows."
>
> Bob and Harvey Weinstein–the brothers Miramax–have chutzpah. Everybody
> knows it. It’s not a secret. While other moviemakers might kiss up–oh
> so discreetly, with whispered, off-the-record phone calls–to certain
> industry reporters, the Weinstein brothers just go all out. On June
> 23, for instance, they’re throwing a big party for Variety editor in
> chief Peter Bart at Barneys. Why? Well, why not! Plus, he’s been on
> the job for 10 years, and this is just their way of saying, you know,
> thanks.
>
> Not to suggest that Mr. Bart could ever be swayed in his coverage of
> Miramax by something so … so inconsequential as a party. Of course
> not! And not to suggest that the Weinsteins would actually try to
> influence a media priest. God forbid! But still there’s something …
> well … odd? off-putting? Oh, never mind. It’s the new media. Swing,
> baby.
>
> Speaking of Mr. Bart, he’s losing people. His film editor, his TV
> editor, his New York editors and a New York-based business reporter
> have all taken off. Not since Cecil B. DeMille’s The Ten Commandments,
> with its thousands of extras leaving Egypt, has there been such an
> exodus!
>
> By Mr. Bart’s own admission, Variety is already understaffed, so it’s
> tough. Here’s the rundown: New York editor Martin Peers is heading to
> The Wall Street Journal, where he is replacing Eban Shapiro on the
> entertainment beat. (Mr. Shapiro is going to Newsweek to be senior
> editor of the business section.) Richard Morgan, who worked for Mr.
> Peers in the New York bureau, is leaving for The Deal, a new Wall
> Street daily. Others have succumbed to temptation and joined the
> industry they cover. TV editor Jenny Hontz has left to become a vice
> president at Touchstone Pictures, which is a division of the Walt
> Disney Company. And film editor Dan Cox has left to become an agent at
> the Broder Kurland Webb Uffland Agency.
>
> "When people interview here, I make sure to ask that they not use it
> as a stepping stone to entertainment," said Mr. Bart. But he
> understands. Oh, how he understands. Once Mr. Bart himself left The
> New York Times to be vice president of production at Paramount
> Pictures. "It ill-behooves me to say, Stay in the priesthood," he
> said.
>
> Have a nice 10th-anniversary party, Mr. Bart! But know that those
> catty journalists in the Hollywood community have duly noted that
> Disney chairman Joe Roth threw a party for you last summer, when your
> book The Gross came out. We’re just here watching your back for you.
> (Note to the reader: Disney owns Miramax. Come on, people. This stuff
> is easy. Keep up!)
>
> Bill Buford was overambitious in putting together The New Yorker’s "20
> writers for the 21st century." That’s all there is to it. There wasn’t
> room for stories by 20 writers, and so The New Yorker took the …
> unusual step of printing five excerpts alongside 15 full stories. Mr.
> Buford, an American by birth who has spent many years in Britain,
> likened the excerpts to "teasers in the cinema" (translation for the
> American readers: "trailers at the movies").
>
> Mr. Buford made a big noise with his literary lists back when he was
> editor of Granta. But Granta was more conducive to running stories by,
> say, 20 writers in one issue than The New Yorker, which is a
> commercial enterprise functioning in a market where serious short
> fiction is not really all that valued by advertisers.
>
> Publisher David Carey takes no responsibility: "We nailed it on
> advertising," he said. "We’re way over from last year. Last year we
> did 77, and this year we did 109," he said, referring to the number of
> advertising pages sold for this year’s and last year’s summer fiction
> issues. He noted that "there’s an editorial page budget" that they
> just couldn’t go beyond.
>
> Mr. Buford fought hard. "I was arguing right up to the very end with
> people, throwing tantrums," he said. Mr. Buford said he tried to get
> the magazine to drop Talk of the Town, the critics and even the
> cartoons. One thing that did run: the New Yorker-commissioned glamour
> shots of all 20 writers standing in Manhattan, with views of New
> Jersey in the distance, at their backs.
>
> Mr. Buford said only one literary agent gave him a hard time for
> excluding her client’s story. "She kept me on the phone for 30
> minutes!" he said. Ah, such is the editor’s life.
>
> The magazine corralled actors into reading from the issue at Joe’s Pub
> on Lafayette Street, starting on June 15. That night, Mr. Carey
> enthused about the advertisers in the room. Actress Rosie Perez
> meandered through a Junot Diaz story–and the author did not look
> pleased.
>
> At a party at his Gramercy Park apartment afterward, Mr. Buford said
> he didn’t fight for a bigger page budget. He knows a magazine like The
> New Yorker should be making money. "It’s very important," he said.
>
> The five of the 20 who did not see their stories published in full
> were Michael Chabon, Ethan Canin, Jonathan Franzen, Nathan Englander
> and Matthew Klamm. The magazine will run their stories in full
> eventually.
>
> There have been boxes marked for donations for "Kosovo Relief" by the
> elevators of the old Condé Nast building at 350 Madison Avenue for
> several weeks now. This has caused some confusion. Just what do the
> Kosovars need that Condé Nast editors got for free and are willing to
> throw out?
>
> Not much, at least on the Mademoiselle floor.
>
> "There’s nothing in ours," said one confidante. Nothing at all? "Some
> polka-dot shirt. I don’t know if that means people are stealing from
> it or what."
>
> At Vogue, one junior staff member got nabbed–by Vogue queen Anna
> Wintour herself–rooting through that magazine’s Kosovo Relief box. She
> thought the box was full of free stuff. Force of habit.
>
> At the Allure box, there was a bit of a tiff between two staff members
> over whether it was appropriate or not to donate makeup. At Glamour, a
> stern memo went out via e-mail to all staff members, warning them to
> get their leftover winter sweaters out of the closets or else they
> would end up in the box!
>
> The Vanity Fair Kosovo box perhaps gave a clue to that magazine’s
> mindset. (The ruling ethic there is a jolly sense of privilege, mixed
> with a semi-depraved sense of irony straight out of Donna Tartt.) It
> contained a slightly torn and slightly pilled pashmina shawl, Stila
> lip gloss and an outdated movie studio release guide.
>
> <Picture>back to top
>
> This column ran on page 6 in the 6/28/99 edition of The New York
> Observer.
>
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